DeFi is one of the fastest-growing, most compelling areas of the cryptocurrency ecosystem, largely due to its transparency
A record $3.3bn from cryptocurrency businesses was stolen last year by crypto hackers, says blockchain firm Chainalysis.
In theft compared to the $3.3bn in 2021, it represents an increase of half a billion dollars.
The increase is even more pronounced when compared to 2019 and 2020, when the total for each year was significantly lower at $500m.
North Korea blamed for crypto hacks
As $775.7m was stolen in 32 separate attacks, with the hacks on BNB Chain and Mango Markets being the two most notable, October, over the course of 2022, stood out as the biggest single month ever for cryptocurrency hacking.
Driven in large part by the hack at Axie, March saw another spike in cryptocurrency hacking with $732.4m stolen.
The Chainalysis figures, included in its annual Crypto Crime Report, reveal a shift in targets.
Until 2020, hackers most heavily targeted centralised exchanges; now the victims of illicit activities are disproportionately in Decentralized Finance (DeFi).
DeFi protocols accounted for the overwhelming majority (82.1%) of all digital currency stolen by hackers, $3.1bn, up from 73.3% in 2021.
Kim Grauer, Director of Research at Chainalysis said, “DeFi is one of the fastest-growing, most compelling areas of the cryptocurrency ecosystem, largely due to its transparency.”
“But that same transparency is also what makes DeFi so vulnerable — hackers can scan DeFi code for vulnerabilities and strike at the perfect time to maximise their theft.”
“DeFi protocols remain vital to the future of the crypto ecosystem, and their inherent transparency has many important benefits.”
“But in order to grow, thrive, and eventually penetrate the mainstream, these DeFi protocols need to prioritise security such as third-party code audits,” Grauer added.
Over the past few years, North Korea-linked groups have by far been the most prolific cryptocurrency hackers, said Chainalysis.
Stealing an estimated $1.7bn worth of digital currency across several hacks, in 2022, these groups shattered their own records for theft.
This figure eclipses the amount generated by all exports by the country, which in 2020 totalled just $142m worth of goods, indicating that digital currency hacking now likely contributes a sizable portion of the nation’s economy.
North Korea is also one of the driving forces behind the DeFi hacking trend that intensified in 2022 as $1.1bn of the cryptocurrency stolen by hackers linked to the country was from DeFi protocols.
Also read: Trends of Cloud Computing and Cyber Security in 2023
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